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Reuters has reported that Mallinckrodt Plc has tentatively agreed to pay $15.4 million to resolve a US Justice Department investigation into company promotional practices for Acthar gel.
The company came under scrutiny when it was published that Medicare was paying $16,2371 per patient for nearly 3100 patients, thereby becoming one of Medicare’s highest paid expenditures at a half-billion US dollars per year.
In March, the department joined a pair of whistleblower lawsuits that alleged Questcor Pharmaceuticals, which Mallinckrodt acquired in 2014, defrauded government healthcare programs by illegally marketing Acthar.
The Justice department has been investigating Mallinckrodt, alleging misuse of patient assistance charity as a conduit to improperly subsidize Medicare patients’ copayment obligations. This occuring while Mallinckrodt notoriously raised drug prices for Acthar Gel from $40 a vial in 2001 to nearly $40,000 per vial today.
Drug companies are prohibited from subsidizing copayments for patients enrolled in the government’s Medicare healthcare program for those aged 65 and older. Companies may donate to non-profits providing copay assistance as long as they are independent.
The company has said that this agreement-in-principle to resolve the department’s marketing investigation is subject to finalization and contains no admission of wrongdoing.
In 2018 Acthar sales were $1.11 billion in 2018, or 35% of Mallinckrodt’s total revenue $3.2 billion in net sales.
(read the attached link for the full story)
The case is U.S. ex rel Strunck v. Mallinckrodt ARD LLC, U.S. District Court, Eastern District of Pennsylvania, No. 12-cv-175.